Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 827
                                        H.D. 3
                                        S.D. 1

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Ways and Means, to which was referred H.B.
No. 827, H.D. 3, S.D. 1, entitled: 


begs leave to report as follows:

     The purpose of this bill is to authorize the Board of Land
and Natural Resources to issue new leases to existing lessees in
the Banyan Drive resort area of Hilo.

     The State owns virtually the entire Banyan Drive resort
area.  Your Committee finds that the State has a significant
interest in maintaining the value of the land and the State's
surrounding properties.  The majority of leases in the area are
set to expire in 2015.  This is a comparatively short time for
resort property, and as a consequence, the lessees will have
increasingly less incentive to maintain their facilities and make
investments in improving their infrastructure.  Your Committee
finds that the State is in a unique position in regard to these
leases, and that an exception to the general policy of making
land available to the highest bidder should be made here, to
ensure that the resort character of the area is maintained and

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                                   STAND. COM. REP. NO. 1558
                                   Page 2

     Your Committee also finds that the bill contains conditions
to ensure an appropriate, fair lease rent will be charged and
that the State will not subsidize the lessees.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of H.B.
No. 827, H.D. 3, S.D. 1, and recommends that it pass Third

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,

                                 CAROL FUKUNAGA, Co-Chair

                                 ANDREW LEVIN, Co-Chair

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